re-exported, had not yet commenced. Certain it | security of the revenue, ought not to exist; but if is, that the Secretary's views proved to be any- necessary for 'protection,' such obstacles and rething but correct. I do not mean to say the Sec-strictions ought to have a money value atfixed to retary was stupid or indolent in his business-but I them, and be put into the plain shape of an addimean rather to excuse his mistake-for who can make any confident estimate of probable revenue, when the receipts of the Custom-House are not governed by the consumption of the country, but by East or West winds, and are subject to all the uncertain deductions of debenture?

tion to the rates of duty, when they would be in a great degree disarmed of any injurious effect upon general trade, by a Warehousing System.

"2nd. That importations would be so excessive, when no duty need be paid until the article was delivered for consumption, that large exportations of the precious metals would necessarily follow to the great damage of trade.

"I was asked some months ago to make a short summary of, 1st, The advantages of a Warehousing System-2nd, The objections which had been "Reply. Let trade regulate itself. If importaraised to it and 3rd, the replies to those objections are too large, the export of specie will check tions. I will now repeat the whole, leaving out the objections of Secretaries of the Treasury in particular, simply because, as they have no sound ones to offer, we need not fear that the present Secretary will offer any.

AS TO THE ADVANTAGES.

"1st. The greater independence of changes in rates of duty, which it would impart to foreign commerce, and therefore the facility with which duties might be altered hereafter, as necessity or expediency might require, without agitating the entire trade of the country, or going into a revision of the entire Tariff; the principle being understood that the rate of duty to be paid, is the rate existing at the time of payment.

"2nd. The abolition of the Debenture System, with all its complications and risks.

"3rd. An even flow of revenue, step by step with the consumption of the country; and not, as at present, dependent upon East winds or West winds, over-importations or under-importations, de

bentures and drawbacks.

"4. The existence of larger stocks of foreign

merchandise, which would tend to increase the

export trade, to prevent fluctuations in prices here, and to make us more independent of fluctuations abroad.

"5th. The acquisition of an increased portion of the trade of all neighboring countries.

6th. The greater extension to small capitalists of the ability to trade in high-dutied articles, and therefore the diminished power of great capitalists to make monopolizing speculations.

As To
THE OBJECTIONS AND MY REPLIES TO

66

THEM.

them. The present system has not prevented the export of specie; it has been exported; why then adhere to it for any such imaginary virtue? Besides, merchants do not require the guardianship of Congress to prevent them from over-trading, any more than manufacturers or planters require it to prevent the building of too many mills, or the planting of too much cotton and tobacco.

6

"3rd. That the construction of great Government Warehouses,' at vast expense, would be necessary for carrying out the System.

"Reply. No such necessity exists; nay, any building, or hiring of Warehouses, by the CustomHouse, or Government, would, in practice, be less necessary, than under the present system; and any such proceeding is particularly to be deprecated. housing business' to private competition, as it is There is no objection to throwing open the 'Warein Liverpool, for instance, where, in 1842, there

were 349 private Warehouses, or receptacles, licensed for bonded goods;-the Government having

nothing to do in the matter, but to license Warehouses, when required, if properly secured accordand keep the keys, the rate of storage being an ing to law, and to put their own locks upon them,

affair between the owner of the Warehouse and

the owner of the goods, and in which, neither the Government nor any of its officers, ought to be permitted to be interested. In fact, I consider the opening of the bonded storage business,' to private competition, particularly desirable.

"4th. That it would only tend more and more to aggrandize the city of New York.

66

Reply. I have already said enough to show, that this is a particular effect of the present, and certainly would not be of the proposed system. "It is unnecessary to go into the details of a Warehousing Bill in this place: but, in them, as in the sciences, a few first principles will solve a great many questions, and particularly the principle, that the duty is on the consumption.

"1st. That large stocks of foreign goods would be accumulated in our ports, to the injury of the prices of similar home-made fabrics and products. Reply.-Allowing, for the sake of argument, "Is interest to be charged on the duty, from the that the effect upon prices would be as alleged, time of warehousing, to the time of payment! such an indirect mode of ، protection, as impo- No; for the duty is on the consumption, and the sing restrictions which are injurious in their gen- goods are supposed to go into consumption when eral effect upon trade, and not necessary for the 'it is paid.

"If the duty is 20 per cent. when the goods are warehoused, and only 10 per cent. when they are entered for consumption, which rate is to be paid The rate existing at the time of payment, because the duty is on the consumption.

"Should goods, warehoused in New York, be allowed to be sent under bond to Boston, to be rewarehoused there, that the Boston man may pay the duty on them, in Boston, when he chooses, or export them from Boston? Should a transfer of ownership of goods in warehouse be sanctioned and recorded by the Custom-House, from the importer to the dealer, or retailer, that the latter may pay duty, from time to time, on such portion as he wishes to have under his own control?

how the self interest of merchants leads them, (and they may be scarcely conscious of it themselves,) to give erroneous views to Government upon questions of commercial policy, mainly in consequence of the particular operations of the present system of collecting duties.

"From all that I have said, I think it follows conclusively, that the Warehousing System is eminently fitted for a country like ours, where progress and change are so rapid, that alterations must necessarily be made in the rates of duty. Under its operation, such alterations can be made without paralizing general trade. The revenue can be sooner increased, whenever desirable, and sooner decreased, in order to avoid the many dangers ari

"The answer to both is: Yes; for the duty is on sing from surplus revenues; and, in fine, the whole the consumption.

"Another principle of the system is, that the merchant, having the option of bonding, (i. e. Warehousing,) or paying duty, must abide by the consequences of his own choice; and, therefore, a duty once paid, is never refunded. If goods are burnt in a bonded Warehouse, or if they are lost or destroyed at sea, when going under bond to another place, no duty is exacted on them; but if they are pilfered while under bond, duty is exacted on the deficiency. In the former cases, they have not gone into consumption; but, in the latter, the pilfered portion probably has.

"Question upon question might be started, and answered; but I have written enough already to furnish examples.

"I will, however, say a few words more. "The duty to be paid being at the rate existing at the time of payment, the importer, or dealer, however high the existing rate may be, can hold his stocks in bond, without fear of being entrapped by a reduction of duty; while, on the other hand, the present system, by exposing the holder of large stocks, (necessarily duty-paid,) to the risk of loss from reduction of duty, causes, and must always cause, the stocks of high-dutied goods to be inexpediently small. The Government may indeed make provision for returning the duty in such cases, but this would give much trouble, cause expense, create confusion, and lead to frauds; while, under a Warehousing System, such refundings of duty are practically unnecessary.

country, and all the interests in it, except, perhaps, the mere monopolizing capitalist, can be benefitted.

"If any objections are started, I do not doubt that I shall be able to prove that they are frivolous, selfish, or unsound; or, at all events, applicable with greater force to our present system. New York, 28th August, 1845."

I think, that every one, at all conversant with the subject, will agree with me, that the proposition is proved, and that, after such a demonstration, my friend might have written Q. E. D. to the pons Asinorum in the 1st Book of our Commercial Code.

There are, though, still other points of view, in which this question might be presented, or further urged, without, by any means, exhausting the subject. Its effects upon the consumer here, might be examined more in detail. We might show, more at large, how it would increase consumption, increase both demand and supply; and swell the revenues of the Government; the practical simplicity of its operation; the convenience with which the Tariff might be altered and amended, without throwing the whole commerce of the country into a feverish state; the protection it would afford the consumer against famine prices and inordinate speculation; the readiness with which it would yield increased revenue, to meet the exigencies of sudden war; the manner in which it would lessen the chances of war, by strengthening the bonds of peace and drawing closer the ties of friendship, by extending and increasing the system of mutual dependance between us and the neighbouring nations of this continent :-each and all of these points afford strong views that might be urged in its favor; and some of them have heen so urged by my friend, whose letter I have quoted.

"Again. Suppose I have ordered a cargo of tea from China, and a duty of 10 cents per pound is imposed before it arrives: I should, under the present system, complain very much of having to pay such a duty in cash before landing it; for I might be compelled, by the outlay of money, to make sales before the full effect of the duty had There is one other point of view, however, in been felt in the market price. But under a Ware- which I beg the indulgence of only a hasty view housing System, I should have no ground for com- of its operations. plaint, because I could then refrain from selling Our trade in the reëxportation of foreign merchanmy tea, without any more inconvenience, than if dise, exemplifies in a remarkable manner, the corit had remained free of duty. We can see here, rectness of some of the positions already advanced,

46

ders of yours will just about enable her to complete her cargo--an assorted cargo, by the way, is the best kind—I'll put this Western produce on board, and she will soon convert it into tea and coffee, which I can let you have cheap; for, though they will first have to be landed in New York, for which place the bulk of the cargo is intended, still there are no Custom-House charges in the way."

Why not let her bring my silks too?" asks the Mexican.

with regard to still further advantages of the Ware-free? The American merchant, we will suphousing System itself. I derive my facts from pose, offers to a guild of foreign merchants, such official statements and other authentic sources, that as Canadians, French, Mexicans, etc., a lot of have been brought within my reach since the fore-Western produce; none of them want it in its going was written. proffered shape; but the Mexican wants silks, the Tea and coffee, with a few other, but by no Canadian tea, the Frenchman wants coffee, &c. means leading articles of commerce, pay no duty at Very well," is the reply to the last two, “I present; they constitute the basis of this reexport-have a ship trading to Java and China; these oring business; and the course of trade, as far as they are concerned, is as it would be with them under the Warehousing System. Let us therefore call these, "Warehousing" articles, to distinguish them from all other articles of foreign merchandise, which are reëxported with the obstructions of our present regulations upon them. Let those, which are so obstructed, be designated as "drawback" articles. Now, the last treasury report shows, that the value of our trade with British America in the articles of the "Warehoused" classification, exceeds that in "Your present wants, will, no doubt, be supplied those in the "drawback" class, TEN times. Of the before my ship returns," is the reply, "I shall then former class, our merchants sent to Canada and New have to land your silks, and deposite one third of Brunswick, $1,250,000, and only $113,000 of the their value in cash with the collector, till you latter. And to mark this contrast, in colors still more want a fresh supply, which may be six months, striking, it should be recollected, that in the classifica-or a year; and in the meantime my money is tion of" drawbacks" are included all the great sta-lying idle in the Custom-House. This will make ples of commerce, and almost every article of for-your silk cost more, for I must not only charge eign production, except tea, coffee, gold and silver; you with commissions for this advance to the which last articles constitute the " Warehoused" di- Custom-House, but you must also give enough vision. The reëxport trade of the country, in these for the goods besides, to pay me for lying out few items of the "Warehoused" class to all parts of of the use of this money in the Custom-House. the world, exceeds the reëxport trade in the "draw- I can't venture. Go to an English merchant. back" class, in the proportion of $8,000,000, to He can bring what silks you want from China, $3,500,000. The latter class paid $1,166,000 into our Custom-House, when they arrived, and took it back again, minus commissions, when they cleared, and merely yielded that paltry 2 per cent., or about $29,000 to the Government. Why should we not, therefore, let all other articles, as well as tea and coffee be Warehoused, and be re-exported free of Custom-House tolls and pawn-broking regulations? This reëxport trade would increase the business of our merchants, benefit our commerce, give employment to our shipping, and greatly increase the consumption of your produce abroad. Take a case: gratiá exempli:

in one corner of his vessel-land them in England, without any of the obstructions that are in my way. He Warehouses them, and reësports them without paying Government a cent; and, therefore, can undersell me. Thus we lose much of your business."

Thus the business of the country suffers, and the merchant is prevented from converting so much of your cotton and tobacco, or some other stuff, into silk for the Mexican, and so with all the "drawback" articles.

As you increase the ability of one class to sell cheap, by enlarging the market, you increase the What did our merchants give in exchange for ability of another to buy. The two are correla these eight millions of "Warehoused" articles, tives, and stand as closely in their relations, as that were reëxported from the country? They cause and effect, as do the admirably regulated gave the produce of your soil, or the fruits of principles of supply and demand. American labor, in some shape. Suppose these That the course of trade here alluded to, is emiarticles had been saddled with deductions and ob-nently calculated to benefit the producers of the structions of drawback :--instead of reëxporting country, cannot be denied. Suppose that there upwards of 8 millions, we would have reëxported were some magic wand, or wonderful lamp, by less than one; for this is the ratio between the ex- which your produce, as it passed down the Misports of the Warehoused' and 'drawback' articles, sissippi, might be suddenly converted into teas, as given by Custom-House figures. Would not, silks, wines, coffee, sugar, salt, and all varieties therefore, the trade of the country, and, conse- of merchandise :--would not such metamorphosis of quently, the markets for your produce, have been raw produce extend your markets, and create demand lessened to the extent of $7,000,000, had they for additional supplies from you! Precisely similar, been subject to "drawback" instead of being duty as to effect, will be the operation of this Warehous

A MONTHLY MAIL TO OREGON.

I will but mention this one subject more, and be done.

ing System. Take away the present system, which prevents a similar operation, substitute the Warehousing System, and then give your cotton, hemp and tobacco, provisions and bread-stuffs, to our ships. They will take them off beyond the seas, conduct A regular Mail through that Territory, and thence them through the labyrinths and laboratories of to the Sandwich Islands, is another of those meacommerce, and in a little while bring them back sures, which are of self-evident importance. A to you in the shape of teas, wines, silks, groceries, mail-line from Independence, across the Rocky or dry goods, hardware and cutlery of all sorts, Mountains to Oregon, would keep perpetually bright paterns, and descriptions. For these, you might the links in the chain, which most do bind those find buyers, in markets where the raw articles danger-loving pioneers there to their native land. would have perished on your hands. According to Early associations, bright spots in their memory, estimates, based upon official data, the removal of and much that is dear to the stout and brave hearts the present, and the introduction of the proposed sys- of these emigrants, are still on the morning side tem, would increase the export trade of the country of the Rocky Mountains. Afford them the means $20,000,000, and the import trade, nearly as much. of frequent communication with "Father-land," What class among ship-owners, producers, or con- and those they have left behind them, and they. sumers, would such an increase of trade not will at once feel, that neither snow-clad mountain, benefit? nor rugged heights, nor distance, nor difficulty, nor

The total value of duty-paying articles imported into the country last year, was $83,668,154, and of the reëxportations from these, or the "drawback" class, the value was $3,519,760, or 4 per

cent.

danger, nor all the powers of man, nor physical obstructions, can separate them from their country

and us.

hold of this Government, and will become for us a Encourage such feelings;-they are the strongcitadel of strength in Oregon, which cannot be The value of the free, or "Warehousing" arti- moved. Study, therefore, the interests of these cles, imported for the same time, was $24,766,881; people; they are of our own flesh and blood; keep and the value of their reëxports $7,965,107, or up an oft-repeated and friendly intercourse with 32 per cent. According to these rates, if the them; let it be mutually advantageous; and these Warehousing privileges had been enjoyed alike lovers of liberty in the forest, as they reclaim the by all varieties of merchandise, as well as by tea fruitful valleys of the Columbia, from the savage and coffee, we should have imported, of the first and the wilderness, will bring them in as free-will class, $110,000.000, and reëxported $27,000,000, offerings, and in majestic sovereignty, add State instead of $3,500,000. These are startling results, after State to the glorious "Union." Properly cared and it may again be asked, where would the means for, these emigrants and their followers, with come from to buy these extra $24,000,000 of for- axe and rifle will execute for you, out there eign stuff. I answer, without the fear of contra-in the wilderness, a deed, and convey to you a diction, that a fair quota of them would be forth- right and title, to that Territory, which neither coming from the Great Valley of the West, so court nor crown can dispute. soon as the laws of supply and demand could ope- Arrived at the mouth of the Columbia, the Mail rate there. Supposing the present ratio between should be continued on to the Sandwich Islands. the exports and imports of the country to remain For this purpose, three or four men-of-war schoothe value of the former, under the pro-ners, or what would be better, a couple of armed posed system, would be $124,000,000; under the steamers, should be sent out there. present system, it is $108.000,000.

the

same,

This is an important and interesting view of the subject, and it would be profitable to follow it out in its various aspects, did time and circumstances permit.

merchandise.

By this arrangement, the letter-distance of our merchants, from their business in the North Pacific-from China, and the numerous islands and populous countries, bordering upon that Ocean, would be lessened by one half.

About ONE FOURTH of all the commerce of Great We have a fleet of 600 whaling vessels, manned Britain consists in the RE-EXPORTATION of bonded by 16,000 American seamen, continually cruising Such are the fruits of the system and fishing in those seas. The Sandwich Islands there. But suppose they should not be as abundant are their place of rendezvous for refits and provihere. What, if instead of giving to this country sions. This fleet offers a home-market, at once, forty millions more of commerce to fetch and carry, for all the present surplus produce of our citizens it should give but twenty, or ten, or five, or ONE, is in Oregon. Hitherto neglected by the Governit not worth having? Take the narrowest view of ment, or but little cared for, these ships float a the subject that stolid ignorance can suggest, and capital of not less than $20,000,000, and are it still presents one of those cases in which the freighted with interests even more valuable. Such South, or the country, can't lose, and may gain. 'a channel of communication between them, their

VOL. XI-76

owners and friends in the Atlantic States, would, | speedy establishment of this mail-line, and to the with its collateral results, be of incalculable ad- sagacity of the keen-sighted statesmen of the vantage. These vessels are generally absent three" Great Valley of the West," do I commend and years at a time, and cases occur in which they do commit the measure.